# DELHI CLOTH MILLS v. WORKMF.N (Miller, I.)

- **Citation:** [1967] 1 S.C.R. 882
- **Court:** Supreme Court of India
- **Decided:** 1966-10-14
- **Case number:** Civil Appeals Nos. 2100 to 2102 of 1964
- **Bench:** K. N. WANC1100 At-:D G. K. Mrnrn
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/delhi-cloth-mills-v-workmf-n-miller-i-3929
- **Pages:** 16

## Headnote

Jndus1rial Disputes Act (14 of 1947) s. 10(1)-/ndustrial Tribunallimits of jurisdiction with respect to o;Jer of reference of industrial dispure-"lncidental", meaning of.
Four issues, arisios out of industrial disputes between the Management of Delhi Cloth Mills and Swatantra Bharat Mills (two units of tho
same company) and their wurkmcn, iw·cre referred 10 the
Jnduslrial
l'ribunal. Issue 3 in the order of reference raised the question whether the
strike at the Delhi Cloth Mills and the lockout declared by the Management were justified and legal; and issue 4, whether the sit-down strike
at the Swatantra Bharat Mills was justified and legal.
As regard• these
issues the contention of the ~fanagcment was that the issues were framed
on the basis that there were strikes at the two units, and the only questions referred to the Tribunal for decision related lo the legality of and
jusrification for, the said strikes.
As regards issue 1, relating to the calculalion of die bonus table; the case of lhe Management was that lhcrc were
settlements on various dates between the Management and the Unions of
\\'\lrkrne,o, and in view of those settlements it was not open to the workmen to reopen the matter.
The Tribunal overruled the pleas of the
Management.
It held that as the existence of the strikes was disputed by
the workmen, it would be its duty and within its jurisdiction to decide
whether there were strikes at the Mills at all; that in doing so, it would
not be going beyond the scope and ambit of the reference; and that the
parties would be at liberty to adduce evidence in confinnatioo or denial
of the existence of 1:1e strikes.
As regards issue I, relating to bonus. the
Tribunal held that if after taking evidence it was found that as a result
of the settlements referred to by the Management, the claim was barred,.
it woulJ not be allowed.
Jo appeal to this Ccurl,
HELD : (I) The basis of issues 3 and 4 was that there were strikes
at the two Units and a lock--0u1 declared by the Management at one. On
the issues as framed, it woufd not be open to the workmen to qucslion
the exis1encc of the strikes or to the Management to deny the declaration
of a lock--0u1.
The parties could place before the Tribunal such facts
;is would show that the dispute referred was not an industrial dispute
at all, or explain their conduct or their respective stands on the propriety and legality of the strikes and lock--0ut.
But they could not be
allowed lo argue that the order of reference was wrongly worded and
th::it the very hasfs of the order of reference
was open to
challenge.
Therefore, the. Tribunal had to examine issues 3 and 4 on the basis that
there was a strike al the Delhi aoth Mills and a sit-down strike at the
Swatantra Bharat Mills. and that there was a lock--0ut declared with
regard to the former as stated in lhe order of reference. and decide on
lhe evidence adduced, . whether the strikes and lock--0ut were justified
and legal.
[887 G-H; 892 F-H; 893 F~GJ
The Industrial Tribunal must confine its adjudication to "the points
or dispute referred and
matters
incidental
thereto.
lt is not free .to
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DELHI CLOTH MILLS v. WORKMF.N (Miller, I.)
883
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enlarge the scope of the dispute referred to it but must confine its atiention to the points specifically mentioned and anyihing which is "incidental" thereto. Something "incidental to a dispute" means something happening as a result of or in connection with ihe dispute or associated with
t.he dispute.
The dispute is the fundamental thing while some.ihing incidental thereto is an adjunct to it.
It cannot cut at the root of the main
thing to which it is an adju_nct. [887 C-D, E-F]
B
Express Newspapers v. Their .Workmen,
[1962] 2 L.L. 227 (S.C.)
and Syndicate Bank v. Its Workmen,
[1966]
2 L.L.J .. 194
(S.C.),
explained.
( 2) The parties were not bound by any agreement with regard to
the first issue and the TriJ>unal would have to take evidence to come to
a finding on it.
[897 DJ
c

## Text

_Characters 0–39,669 of 43,743. This is a partial read: ask again with offset=39669 for what follows._

DELHI CLOTH & GE~£RAL MILLS CO. LTD.
I'.
THE WORKMEN & ORS.
October 14, 1966
(K. N. WANC1100 At-:D G. K. Mrnrn, JJ.]
Jndus1rial Disputes Act (14 of 1947) s. 10(1)-/ndustrial Tribunallimits of jurisdiction with respect to o;Jer of reference of industrial dispure-"lncidental", meaning of.
Four issues, arisios out of industrial disputes between the Management of Delhi Cloth Mills and Swatantra Bharat Mills (two units of tho
same company) and their wurkmcn, iw·cre referred 10 the
Jnduslrial
l'ribunal. Issue 3 in the order of reference raised the question whether the
strike at the Delhi Cloth Mills and the lockout declared by the Management were justified and legal; and issue 4, whether the sit-down strike
at the Swatantra Bharat Mills was justified and legal.
As regard• these
issues the contention of the ~fanagcment was that the issues were framed
on the basis that there were strikes at the two units, and the only questions referred to the Tribunal for decision related lo the legality of and
jusrification for, the said strikes.
As regards issue 1, relating to the calculalion of die bonus table; the case of lhe Management was that lhcrc were
settlements on various dates between the Management and the Unions of
\\'\lrkrne,o, and in view of those settlements it was not open to the workmen to reopen the matter.
The Tribunal overruled the pleas of the
Management.
It held that as the existence of the strikes was disputed by
the workmen, it would be its duty and within its jurisdiction to decide
whether there were strikes at the Mills at all; that in doing so, it would
not be going beyond the scope and ambit of the reference; and that the
parties would be at liberty to adduce evidence in confinnatioo or denial
of the existence of 1:1e strikes.
As regards issue I, relating to bonus. the
Tribunal held that if after taking evidence it was found that as a result
of the settlements referred to by the Management, the claim was barred,.
it woulJ not be allowed.
Jo appeal to this Ccurl,
HELD : (I) The basis of issues 3 and 4 was that there were strikes
at the two Units and a lock--0u1 declared by the Management at one. On
the issues as framed, it woufd not be open to the workmen to qucslion
the exis1encc of the strikes or to the Management to deny the declaration
of a lock--0u1.
The parties could place before the Tribunal such facts
;is would show that the dispute referred was not an industrial dispute
at all, or explain their conduct or their respective stands on the propriety and legality of the strikes and lock--0ut.
But they could not be
allowed lo argue that the order of reference was wrongly worded and
th::it the very hasfs of the order of reference
was open to
challenge.
Therefore, the. Tribunal had to examine issues 3 and 4 on the basis that
there was a strike al the Delhi aoth Mills and a sit-down strike at the
Swatantra Bharat Mills. and that there was a lock--0ut declared with
regard to the former as stated in lhe order of reference. and decide on
lhe evidence adduced, . whether the strikes and lock--0ut were justified
and legal.
[887 G-H; 892 F-H; 893 F~GJ
The Industrial Tribunal must confine its adjudication to "the points
or dispute referred and
matters
incidental
thereto.
lt is not free .to
A
B
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D
E
F
G
H
I
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DELHI CLOTH MILLS v. WORKMF.N (Miller, I.)
883
A
enlarge the scope of the dispute referred to it but must confine its atiention to the points specifically mentioned and anyihing which is "incidental" thereto. Something "incidental to a dispute" means something happening as a result of or in connection with ihe dispute or associated with
t.he dispute.
The dispute is the fundamental thing while some.ihing incidental thereto is an adjunct to it.
It cannot cut at the root of the main
thing to which it is an adju_nct. [887 C-D, E-F]
B
Express Newspapers v. Their .Workmen,
[1962] 2 L.L. 227 (S.C.)
and Syndicate Bank v. Its Workmen,
[1966]
2 L.L.J .. 194
(S.C.),
explained.
( 2) The parties were not bound by any agreement with regard to
the first issue and the TriJ>unal would have to take evidence to come to
a finding on it.
[897 DJ
c
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2100 to
2102 of 1964.
Appeals by special leaxe from the judgments and orders (i)
dated the 16th June, 1966 of thy Special Industrial Tribunal, Delhi
in Reference No. 53of1966 (Delhi Administration) and (ii) and (iii)
dated the 13th July, 1966 and 12th August 1966 of the Punjab High
D
Court (Circuit Bench) at Delhi in Civil Writ Petitions Nos. 488-D
and 122 of 1966 respectively.
M. C. Setalvad, G. B. Pai, Rameshwar Dial and Rameslnvar
Nath, for the appellant (in all the appeals). -
A. S. R. Chari and M. K. Ramamurthi, for. respondent No. !(a)
E
(in all the th rec appeals).
S. Venkatakrishnan and N. K. Bhatt, for respondent No. l
(in all the three appeals).
A. C. Shubh, Ram Kishan and S. S. Khanduja, for respondent
No. l(c) (in all the three appeals).
F
A. S. R. Chari, D. K. Aggarwal and M. V. Goswami, for resG
H
pondents Nos. l(d) and l(e) (in all the three appeals).
D. R. Gupta and H,. K. Puri, for respondent' No .. 2 (in all the
three appeals).
·
S. S. Khanduja, foJ'..-respondent No. 2 (in all the three appeals)
M. V. Goswami, for respondent No. 3(a) (in all the three
appeals).
The Judgment of the Court was delivered by ·
Mitter, J. On March 4, 1966 an order under s. 10(1) ands.
12(5) of the Industrial Disputes Act (hereinafter referred to as the
Act) was passed over the signature of Secretary (Industries and
Labour), Delhi Administration, Delhi referring to the Special
Industrial
Tribunal certain matters setforth in the Schedule
884
SUPREME COURT REPORTS
(1967) I S.C.R.
annexed thereto for adjudication. According to the recitals in
the order, it appeared to the Delhi Administration from a report
submitted by the Conciliation Officer under s. 12(4) of the Act
that an industrial dispute existed between the managements of Delhi
Cloth Mills and Swatantra Bharat Mills and their workmen represented by four different Unions and the Chief Commissioner, Delhi,
was satisfied on a consideration of the said report that the said
dispute should be referred to an Industrial Tribunal. The terms
of reference specified in the Schedule are reproduced below:
"I. Whether in calculating the bonus table for the
accounting year ending 30-6-1965 the allocations separately
made by the Delhi Cloth & General Mills Co., Ltd. towards
the Capital and Reserves of the Delhi Cloth Mills and
Swatantra Bharat Mills, the two units of the Company is
fair and reasonable? If not, what directions are necessary in this regard?
2. Whether the workmen of these Mills are entitled
to bonus at a rate higher than 6 per cent of the wages for
the accounting
year ending 30-6-1965? If so, what
directions arc necessary in this regard ·1
3. Whether the strike at the Delhi Cloth Mills and the
Jock-out declared by the management on the 24-2-1966
are justified and legal and whether the workmen are entitled to wages for the period of the lock-out?
4. Whether the 'sit-down' strike at the Swatantra
Bharat Mills from 23-2-1966 is justified and legal and
whether the workmen are entitled to wages during the
period of the strike?"
The report of the Conciliation Officer shows that trouble
had arisen over the claim of bonus in the Delhi Cloth and General
Mills and Swatantra Bharat Mills, two μnits of the same company.
The report also shows that at a meeting convened at 2-30 p.m. on
February 23, 1966, the Works Committee recommended
that
the payment of bonus should be suspended pending examination of
the entire issue in conciliation or otherwise.
But before this .:ould
be announced, workers started demonstration outside the mill
premises of the first named unit and became violent. To quote
from the report :
"As the situation became tense inside the mill premises
and the workers left work, the management closed down the
turbine at about 4 p.m. on 23-2-1966.
Later on. at about
11 ·00 p.m. the management put up a notice that in view of
the prevailing circumstances in the Mills, it was not possible
to work the mills until conditions become normal. ...... As
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DELHI CLOTH MILLS v. WORKMEN (Mitter, /.)
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there was no improvement in the situation and as workers
who were inside the mills were reported to have caused
further damage to the mill property, the management declared a fock-out at about 6 p.m. on 24th February, 1966 .
. . . . . . The workers, however, are very much restive over the
management's declaration of lock-out."
With regard to Swatantra Bharat Mills, the report runs:
" ...... the situation is peaceful although the workers
resorted to the stay-in-strike from 7 · 30 p.m. on the 23rd
February 1966 and the strike still continues.
It appears
that their attitude is that whatever is decided at the D.C.M.
level will automatically be applicable to them as welL
The workers do not seem to be in a mood to start the work
unless the workers of the Delhi Cloth Mills also start work."
The recommendation in the report was that the dispute should
be immediately referred to a Tribunal for adjudication along with
the issue of prohibitory orders under s. 10(3) of the Act. The
report notes that the Unions' leaders had pressed that the question
of workers' daim for wages for the strike period in the Swatantra
Bharat Mills and lock-out period in the Delhi Cloth Mills should
also be included and the Tribunal to be constituted should proceed
immediately in the matter.
The Management filed a statement of case before the Special
Tribunal on April 9, 1966 and the Unions filed separate statements
of case between April 10, 1966 and April 13, 1966. There were
Replications and Rejoinders up to May 21, 1966.
On June 3. 1966, the Company prayed before the Industrial
Tribunal that·issues l, 3 and 4 (set out in the terms of reference)
may be decided before the parties were called upon to lead their
evidence. As regards issues 3 and 4, the contention of the management was that the fundamental basis of these two matters was that
there was a strike at the Delhi Cloth Mills and a sit-down strike
at the Swatantra Bharat Mills and the only question referred to the
Tribunal for decision related to the legality and justification of the
said strikes. All the four Unions contended before the Tribunal
that there was no strike at the Delhi Cloth Mills. Two of the
Unions' case was that the strike at Swatantra Bharat Mills was in
.sympathy with the workmen of the Delhi Cloth Mills; while the
other two Unions" case was that there was a lock-out in the Swatan~
tra Bharat Mills. As regards the first issue, the case of the Manage-
· ment was that there was a settlement on December 13, 1965.relating
to the computation of bonus for the year 1963-64 between the
Company and the two major Unions. It was stated further that
the settlement referred to the computation of bonus in accordance
with the provisions of the Payment of Bonus Act, 1965 and in arriv-
886
SUPRBMB COURT REPORTS
(1967] I S.C.I.
ing at the settlement, aU the available- and relevant financial
A
statements had been shown to the Unions which accepted "the
accounts based on allocation of share capital and reserves during
the years previous to and including 1963-64. Further, according
to the Management, one of the Unions had entered into another
settlement with the Management of the D.C.M. Silk MiUs with
regard to that Union for the year 1964-65, and in view of these
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settlements, it was not open to the workmen of the Delhi Cloth
Mills and Swatantra Bharat Mills to question the correctness and
reasonableness of the allocations made by the Management towards
share capital and reserves of these two units.
The Tribunal considered the pleas put forward before it and
several decisions cited in support and came to the conclusion that
as the strike covered by issue No. 3 and sit-down strike covered by
issue No. 4 were disputed by the Unions, or at any rate not admitted
by aU of them "it would be the duty of the Tribunal to decide whether
there was a strike at D.C.M. as covered by issue No. 3 and whether
there was a sit-down strike by S.B.M. as covered by issue No. 4."
According to the Tribunal, it would not be exceeding its jurisdiction
at a)l and would not be going beyond the scope and ambit of the
reference to examine issues 3 and 4 in the above light and accordingly, the Tribunal held that the parties would be at liberty to adduce
such evidence as they liked in confirmation or denial of the fact
of a strike and sit-down strike regarding issues 3 and 4.
As regards issue No. 1 also, the Tribunal over-ruled the plea
of the Management and held that it would be open to the parties
to adduce evidence regarding this issue and if in course thereof
it was found that a~ a result of the settlements referred to by the
Management, the claim was barred, the same would not be allowed.
This decision of the Tribunal was announced on June 16, 1966.
The Management moved a Writ Petition before the Punjab
High Court on June 30, 1966 for quashing the order of 16th June
by a writ of certiorari. By an order dated July 13, 1966, the petition was summarily dismissed.
By an application under Art.
133(1) of the Constitution, the Management moved the Punjab
High Court for leave to appeal to the Supreme Court. This was
also dismissed in limine on August 12, 1966. The Management
then moved three Special Leave Petitions Nos. 1068 to 1070 of
1966 before this Court, one from the order of the Tribunal, the
second from the order of the High Court dated July 13, 1966 and the
third also from the order of the High Court dated August 12,
1966.
By an order made on September 12, 1966 special leave was
granted in all these three petitions. All these have now come up
for hearing before us.
Proceeding in the order in which the arguments were addressed,
we propose tv deal with issues 3 and 4 first.
Under s. 10(1) (d)
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DBLlil CLOTH MILLS v. WORKMEN (Mitter, 1.)
887
of tbe Act, it is open to the appropriate Government wh~n it !s. of
opinion that any industrial dispute exists to make an order m wnt.mg
referring "the dispute or any matter apperujng to be con1:1ec!ed :mt~
or· relevant to, the dispute, ...... to a Tnbunal for ad1udicat10n.
Under s. 10(4) "where in an order refe~ring an _industrial dispu~e
to a Labour
Court, Tribunal or Nat10nal Tnbunal under this
section or in a ·subsequent order, the appropriate Government
has specified the points of dispute for adjudication, the Labour
Court or the Tribunal or the National Tribunal, as 'the case may be,
shall confine its adjudication to those points and matters incidental
thereto."
From the above it therefore appears that while it is open to
the appropriate Government to refer the dispute or. any matter
appearing to be .connected therewith for adjudication, the Tribunal
must confine its adjudication to the points of dispute referred and
matteni incidental thereto. In other words, the Tribunal is not
free to enlarge the scope of the dispute referred to it but must confine its attention to the points specifically mentioned and anything
which is incidental thereto. The word 'incidental' means according
to Webster's New World Dictionary:
"happening or likely to happen as a result of or in
connection with something more important; being an
incident; casual; hence, secondary or minor, but usually
associated:"
"Something incidental to a dispute" must therefore mean something
happening as a result of or in connection with the dispute or associated with the dispute. The dispute is the fundamental thing while
something incidental thereto is an adjunct to it. · Something incidental, therefore, cannot cut at the root of the main thing to which
it is an adjunct. In the light of the above, it would appear that
the third issue was framed on the basis that there was a strike and
there was a lock-out and it was for the Industrial Tribunal to.examine the facts and circum~tances leading to the strike and the lockc
out and to come to a decision as to whether one or the other or both
were justified. On the issue as framed it would not be , open to
the workmen to question the existence of the strike, or, to the
Management to deny the declaration of a lock-out, The parties
were to be allowed to lead evidence to show that the strike was not
justified or that the lock-out was improper, The third issue has
,also a sub-issue, namely, if the lock-out was not legal, whether
the workmen were entitled to wages for the period of the lock-out.
Similarly, the fourth issue proceeds on the basis that there was a
sit-down-strike in· the Swatantra Bharat Mills on 23-2-1966 and the
question referred was as to the propriety or legality of the same.
It was not for any of the Unions to contend on the issues as framed
that there was no sit-down strike. On their success on the plea
888
SuPR.BMI! OOUllT R.BPOllTS
(1967] I S.C.R.
of justification of the sit-down strike depended their claim to wages
A
for the period of the strike.
Apart from the consideration of the various decisions cited
at the Bar, the above is the view which we would take with regard
to issues 3 and 4.
We have now to examine the decisions cited
and the arguments raised and see whether it was competent to the
Tribunal to go into the question as to whether there was a strike
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at all at the Delhi Cloth Mills or a sit-down strike at the Swatantra
Bharat Mills or a lock-out declared by the Management on
24-2-1966.
The decisions on the poinf to which our attention was drawn
are as follows.
In Burma-Size/I Oil Storage & Distributing Co.,
of India Ltd. & Ors. v. Their Workmen & Others(') one of the disputes referred to the fifth industrial tribunal by the Government
of West Bengal under s. 10 of lhe Industrial Disputes Act was a
claim for bonus for 1955 payable in 1956 for the Calcutta Industrial
area. The Industrial Tribunal heard both the parties and awarded
4J months basic salary as bonus for the year 1955 to the clerical
staff and the operatives of the companies. This Court referred to
the recital in the order of the Government of West Bengal and
observed that the reference was between the four appellants and
their workmen represented by the named Workers' union on the
other. According to this Court, it appeared from the record that
the said union represented only the workmen in the categories of
labour, service and security employees in the Calcutta industrial
area and so prima facie the two demands made by the union would
c0vcr the claims of the operatives alone. This Court also relied
on the fact that the appellants had dealt with the two categories of
employees distinctly and separately. According to Gajendragadkar, J. (as he then was) who delivered the judgment of the
Court:
"If the reference does not include the clerical staff and
their grievances, it would not be open to the members of the
clerical staff to bring their grievances before the tribunal
by their individual applications or for the tribunal to widen
the scope of the enquiry beyond the terms of reference by
entertaining such individual applications."
Accordingly, it was held that the appellants were right in contendjng
that the tribunal had no authority to include within its award members of the clerical staff employed by the appellants.
In Express Newspapers v. Their
Workmen & Staffi.2) the
two items of dispute specified in the order of reference were :
(1) Whether the transfer of the publication of Andhra
Prabha and
Andhra Prabha Illustrated Weekly
to
(I) [196!] 2 L.L.J. 124,
(2) [1962] 2 L.L.J. 227.
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DELHI CLOTH MILLS v. WORKMl!N (Mitter, /.)
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Andhra Prabha (Private) Ltd., in Vijayawada is justified and
to what relief the workers and the working journalists are
entitled?
(2) Whether the strike of the workers and working
journalists from 27th April 1959, and 'the consequent lockout by the management of the Express Newspapers (Private)
Ltd., are justified and to what relief the workers and
the working journalists are entitled?
On the same day as the Government of Madras made the order
of reference, it issued another order under s. 10(3) of the Act prohibiting the continuance of the strike and the lock-out in the appellant concern. Against this latter order, the appellant filed a writ
petition in the Madras High Court and the workers also _filed ano~
ther writ petition against the order by which the dispute was referred
to the industrial tribunal for adjudication. In regard to the second
petition, the learned single Judge of the Madras High Court held
on the merits that what the appellant had done did not amount
to a lock-out but a closure and so the substantial part of the dispute
between the parties did not amount to an industrial dispute at all. In
the result, he allowed the application of the company in part and
directed the tribunal to deal only with the sec0nd part of the twir
questions framed by the impugned reference. There was some
modification in the order by a Division Bench of the Madras High
Court. The matter then came up to this Court. It was held by this
Court that the High Court could entertain the appellant's pet!tio!l .
even at the initial stage of the proceedings before the industrial
tribunal and observed :
·"If the action taken by the appellant is not a lockout but is a closure, bona fide and genuine, the dispute
which the respondents may raise in respect <if such a closure
is not an industrial dispute at all. On the other hand, if, in
fact and in substance, it is a lock-out, but the said action has
adopted the disguise of a closure and a dispute is raised in
respect of such an action, it would be an industrial dispute·
which industrial adjudication is competent to deal With ..
There is no doubt that in law the appellant is entitled to
move the High Court even at the initial stage and seek to
satisfy it that the dispute is not an industrial dispute and so
the industrial tribunal has no jurisdiction to embark upon
the proposed enquiry."
It was further observed:
"Jf the industrial tribunal proceeds to assume jurisdic'
tion, over a non-industrial dispute, that can be successfully
challenged before the High Court by a petition for' an
appropriate writ, and the power of the High Court to issue
an appropriate writ in· that behalf cannot ·be questioned.
M17Sup.Cl/66-12
890
Sl1PUMB C:OtaT UPOl.TS
( 1967] I S.C.R,
It is also true that even if the dispute is tried by the
industrial tribunal, at the very commencement, the
industrial tribunal will have to examine as a preliminary
issue the question as to whether the dispute referred to it is
an industrial dispute or not, and the decision of this question
would inevitably depend .upon the view which the industrial
tribunal may take as to whether the action taken by the
appellant is a closure or a lock-out. The finding which
the industrial tribunal may record on this preliminary issue
will decide whether it has jurisdiction to deal with the
merits of the dispute or not."
The Court then proceeded to consider the facts of the
case and
the contentions raised before the tribunal. It referred to a settlement which had been reached bemeen
the parties and embodied
in a memorandum drawn up on 6th November 1958 under s. 12(3)
of the Act. This settlement was to operate for two and half years.
The case of the respondents was that during the negotiations between the appellant and the union in the presence of the acting
Labour Minister and the Labour Commissioner, the appellant
had tried to insert a clause in the agreement in respect of the decision that the paper Andhra Prabha would not be shifted for publication to Vijayawada during the period of the settlement and that
the workmen would be continued to be employed as before at
Madras and this was objected to by the respondent whereupon a
verbal assurance was given that the business of the appellant would
be carried on at Madras for two and half years. The respondents
contended that the said assurance was one of the terms of the
conditions of the respondents' service and the transfer effected by
the appellant contravened and materially modified the iaid condition of service. In regard to issue 2, the argument was that in
effect the Government had determined this issue and nothing was
left for the tribunal to consider. The Court observed that the
wording of this issue was in-artistic and unfortunate and held:
"Even so, when the question of this kind is raised before
the CourtS, the Courts must attempt to construe the reference not too technically or in a pedantic manner, but fairly
and reasonably. Thus construed, even the inelegant phraseology in framing the issue cannot conceal the fact that
in dealing with the issue, the main point which the tribunal
will have to consider is whether the strike of the respondents
on 27th April 1959 was justified and whether the action
of the appellant which followed the said strike is a lockout or amounts to a closure ...... Thus, having regard
to the content of the dispute covered by issue 2, it would
not be right to suggest that the reference precludes the
tribunal from entertaining the appellant's plea that what
it did on 29th Apnl is in fact not a lock-out but a closure.
A
B
c
D
F
G
H
' •
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DELHI CLOTH MILLS v. WORKMEN (Mitter, /.)
891
A
The fact that the relevant .119tion of the app~llant is called a
lock-out does not mean that the tribunal must hold it to be a
lock-out."
8
c
D
E
F
G
H
This decision has been referred to by the Tribunal as giving
it jurisdiction to examine the question as to whether there was a
strike at all. Both sides have referred to this decision in support
of their respective contentions. According to the respondents, the
fact that the Tribunal could go into the question as to whether there
was a lock-out or a closure went to show that the Tribunal's jurisdiction was not limited because of the use of the word 'lock-out'
in the second issue so that the Tribunal was precluded from examining the question as to whether there was a lock-out at all while
according to the appellants it was because the Tribunal had always
to consider whether the issue referred was an industrial dispute that
the Tribunal had to scrutinise whether the cessation of business
of the company was due to a lock-out which it was competent
to adjudicate upon or whether it was due to a closure which was not
an industrial dispute at all.
In our opinion, there was enough material on the record In
that case to show that the company had been trying for some time
past to transfer its business elsewhere and the action of the appellant which followed the strike on April 27, 1959 was in fact a
closure and not a lock-out. The facts of that case were very special
and the decision must be limited to those special facts.
In Syndicate Bank v. Its Workmen(') there was ·a dispute
between the appellant bank and its employees with respect to C
rank officers which was referred by the Central Government to an
Industrial Tribunal in the following terms:-
(I) Whether the Canara Industrial and Banking Syndicate,
L~d., Udipi, is justified in imposing the condition
that only such of those workmen would be considered for
appointment as officer-trainee and promotion to probationary C rank officers who agree to be governed by the rules
of the bank applicable to such officers in respect of the
scale of pay and other conditions of. service 1 If not, to
what relief are such workmen entitled 1
(2) Whether the bank is justified in imposing the condition of twelve months training as officer-trainee before
appointment as C rank officer in addition to the probation
prescribed after the appointment as C rank officer 1
If not, to what relief are the workmen entitled 1
Before the tribunal it was contended on behalf of the appellant
that the first term of reference -proceeded on the asiwnption tl111t
(I) [l9") :I L.L.J, 19'.
892
SUPllBMB COURT llBPOllTS
(1967] l S.C.R.
C rank officers were officers of the bank while the workmen urged
that the question whether C rank office'rs were workmen was implicit in the first term of reference. The Tribunal accepted the plea
of the respondents and proceeded to consider that question. It
came to the conclusion that C rank officers were workmen.
On
the question whether the imposition of the condition that workmen
would only be promoted as C rank officers if they accepted the
conditon that they would be governed by the rules of the bank,
it found against the appellant. Before this Court it was argued
on behalf of the appellant that there was no reference on the question
of the status of C rank officers and the tribunal went beyond the
terms of reference when it decided that C rank officers were workmen. It was held by this Court :
"that the first term of reference had implicit in it the
question whether C rank officers were workmen or not.
If that were not so, there would be no sense in the reference,
for if C rank officers were assumed to be non-workmen, the
bank would be justified in prescribing conditions of service
A
B
c
with respect to its officers and there would be no reference
D
under the Act with respect to conditions imposed by the
bank on its officers who were not workmen."
In the last mentioned case, the question whether C rank officers
were workmen had to be examined by the tribunal, for, if they
were not, there could be no reference under the Industrial Disputes
Act. In the case before us, ,there is no such difficulty. The third
and the fourth tenns of reference in the instant case are founded on
the basis that there was a strike at the Delhi Cloth Mills and a sitdown strike at the Swatantra Bharat Mills and that there was a
lock-out declared by the management of the Delhi Cloth Mills
on 24-2-1966. On the order of reference, it was not competent
to the workmen to contend before the Tribunal that there was no
strike at all; oqually, it was not open tc the management to argue
that there was no iock-out declared by it. The parties would
be allowed by their respective statement of cases to place before
the Tribunal such facts and contenlions as
would explain their
conduct or their stand, but 'they
eould not be allowed to argue
that the order of reference wwr wrongly worded and that the very
basis of the order of reference Was open to challenge. The eases
discussed go to show that it is opOf) to the parties to show that the
dispute referred was not an industrial dispute at all and it is certainly
open to them to 1bring out before the Tribunal the ramifications of
the dispute. But they cannot be allowed to challense the very
basis of the issue set forth in the order of reference.
On behalf of the respondents, Mr. Chari put before us four
. prepositions which according to him the Tribunal had to consider
before coming to a decision on these two issues. They were:
E
F
G
H
••
I
•
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DELHI CLOTH MILLS v. WO!lKMEN (Mitter, J.)
893
A
(i) The fact that there was a recital of dispute in the order of reference
did not show that the Government had come to a decision on the
dispute; (ii) The order cf reference only limited the Tribunal's
jurisdiction in that it was not competent to go beyond the heads
or points of dispute; (iii) Not every recital of fact mentioned in the
order of Government was irrebuttable; and (iv) In order to fix
B
the ambit of the dispute it was necessary to refer to the pleadings
of the parties.· No exception ci.n be taken to the first two points.
The correctness of the third proposition would depend on the
language of the recital.
c
D
E
F
G
H
So far as the fourth proposition is concerned,
Mr. Chari
argued that the Tribunal had to examine the pleadings of the parties
to see whether there was a strike at all. In our opinion, the Tribunal
must, in any event, look to the pleadings of the parties to find out
the exact nature of the dispute, because in most cases the order
of reference is so cryptic that it is impossible to cull out therefrom
the various points about which the parties were at variance leading
to the trouble. In this case, the prder of reference was based on
the report of the Conciliation Officer and it was certainly open to the
Management to show that the dispute which had been referred
was not an industrial dispute at all so as to attract jurisdiction
under the Industrial Disputes Act. But the
parties cannot be
allowed to go a stage further and contend that the foundation of
the dispute mentioned in the order of reference was non-existent and,
that the true dispute was something else. Under s. 10( 4) of the Act
it is not competent to the Tribunal to entertain such a question.
In our opinion, therefore, the Tribunal had to examine issues
'3 and 4 on the basis that there was a strike at the D.C.M. unit
and a sit-down strike at Swatantra Bharat Mills and that there was
a lock-out declared with regard to. the former as stated in the third
term of reference. It was for the Tribunal to examine the evidence
onty on the question as to whether the strikes were justified and
legal. It then had to come to its decision as to whether the workmen were entitled to the wages for the period of the lock-out in the
Delhi Cloth Mills and for the period of the sit-down strike at the
Swatantra Bharat Mills.
With regard to the first issue, Mr. Setalvad contended that
there was a binding agreement between the parties which had not
been terminated or which had not come to an end and consequently, the Tribunal had to go into the question and if it came to
the conclusion that there was such a binding agreement, it was
precluded from examining the matter any further. Mr. Chari
for the respondents did not dispute this proposition, but, acco1ding
to him, there was no agreement betweun the parties as contended
for by the Management. We have therefore to refer to the
documents to which our attention was drawn to see whether
894
SUPRBMB COURT REPORTS
(1967) I S,C.R.
there was such an agreement. The first issue relates to the
A
allocation of capital and reserves of the company to the
two
units,
viz., Delhi
Cloth
Mills and Swatantra Bharat
Mills, for calculating the
bonus t? ble for the accounting
year ending 30-6-1965. According to Mr. Setalvad, such allocation had been accepted by the workers in respect of the previous
year and the settlement between the parties was not limited to that
8
year. This was not accepted by Mr. Chari. Mr. ·Chari referred
us to the statement of the case of the Management before the Tribunal dated April 9, 1966. In sub-paragraph (d) of paragraph I,
it was stated by the Management:
"The method and basis of allocation had been consistently adopted every year for the last many years and has
been accepted, expressly or impliedly, by the workers
every year. It has been expressly accerted in a settlement
made in respect of the payment of bonus for the year
1963-64 during Conciliation. A copy of the settlement
dated 13-12-1965 along with its enclosure is annexed;
(Anncxure 'B')."
In sub-para (e) it was stated:
"The allocation has been uniformly made on the
same method and on the same basis for the purpose of determination of available surplus for payment of bonus to the
workers of other textile units of the company (viz., Hissar
Textile Mills, Hissar, & D.C.M. Silk Mills, Delhi). The
workers of these units have accepted this allocation in
respect of the payment of bonus for the year 1964-65 under
agreements entered into with respective unions representing
workmen of these units."
The company has several units and the two units mentioned in subparagraph (e) above are different from the units with which we have
to deal in this case. Consequently, any agreement between the
Management and the workers with respect to those two units
cannot be binding so far as the dispute in this case is concerned.
We then have to consider the nature of the settlement mentioned
in sub-para (d). The first document in this connection is dated
October 27, 1964 executed on behalf of the Delhi Cloth Mills and
Swatantra Bharat Mills on the one hand and Kapra Mazdoor
Ekta Union and Textile Mazdoor Sangh, Delhi, two of the respondents before us, on the other. The relevant portion of the first
clause of the terms of settlement reads:
"According to the Bonus Commission's Formula as
accepted and modified by the Government vide Resolution
No ....... dated 2-9-1964 the rate of bonus payable to
the workmen of the two textile units of the Company viz.,
c
D
E
F
G
H
·.
•
DEL!fl CLOTH MILLS v. WORKMEN (Mitter, I.)
895
A
Delhi Cloth Mills and Swatantra Bharat Mills works out
to 7 · 33 %, of the total earnings viz., basic wage plus
Dearness Allowance, including High Cost Allowance."
B
c
D
E
F
G
H
According to the second clause:
"The company has however agreed to pay bonus for the
year ending 30-6-1964 at the rate of 8! % of the total
average wage earnings as defined above, as a gesture of goodwill and to promote cordial relations in consideration of the
unions having agreed to withdraw all pending bonus disputes unconditionally."
Clause 3 runs as follows:
"The company agrees that in case any further alteration
or modification in Bonus Commission's Formula is made
by the Government hereafter, the application of which
results in any addition to the total amount to be distributed
as bonus for the year ending 30-6-64 only, the workers will
be entitled to receive benefit of the same. It is agreed that
the audited figures of the balance-sheet, profit and loss
account and the basis of any allocation including capital
and reserves etc. for the year 1963-64 will not be challenged
by the unions."
According to cl. 4:
"The Unions agree to withdraw their disputes regarding payment of additional bonus for the years 1960-61,
1961-62 and 1962-63 unconditionally. Any further modification or change in the Bonus
Commission Formula
will not affect these years."
Clauses 5, 6 and 7 are not relevant.
It is clear from the above that the agreement related entirely
to the years 1960-61, 1961-62 and 1962-63 and 1963-64. There is
no statement anywhere about the workers being bound to accept any
figure of allocation with regard to the year 1964-65.
The only other document to which our attention was drawn
bears the date 13-12-1965 and this also was executed by and between the same parties. The document is divided into two portions,
the first being a short recital of the case and the second being the
terms of settlement divided into eight paragraphs. The recitals
of the case show that the bonus for the year ending 30-6-1964
was paid to the workmen of the two Textile Mills in accordance
with the agreement dated 27-10-1964
between the Management
and the Kapra Mazdoor Ekta Union representing the workmen and
that the payment was made according to the Bonus Commission Formula as accepted and modified by the Government. Under the
896
SUPJll!MI! COURT
llEPOllTS
[1967] l S.C.R.
aforesaid agreement, it was agreed that in case any further alteration or modification in the Bonus F orrnula were made by the
Government, the workers would be entitled to receive benefit of the
same. The workers had accordingly raised a demand for additional
bonus in terms of para 3 of the Agreement dated 27-10-1964. The
Kapra Mazdoor
Ekta Union and the Textile Mazdoor Sangh
representing an overwhelming majority of the workmen of Delhi
Cloth Mills and Swatantra Bharat Mills had moved the Conciliation Officer for settlement of this demand for additional bonus.
After mutual negotiations with the help and assistance
of the
Conciliation Officer, the parties had agreed to settle the matter on
the following terms and conditions. Then follow the terms of
settlement. The first is to the effect that the workers reiterate and
re-affirm the agreement dated 27-10-1964.